Predictably Irrational (24 page)

Placebos pose dilemmas for marketers, too. Their profession requires them to create perceived value. Hyping a product beyond what can be objectively proved is—depending on the degree of hype—stretching the truth or outright lying. But we've seen that the perception of value, in medicine, soft drinks, drugstore cosmetics, or cars, can become real value. If people actually get more satisfaction out of a product that has been hyped, has the marketer done anything worse than sell the sizzle along with the steak? As we start thinking more about placebos and the blurry boundary between beliefs and reality, these questions become more difficult to answer.

A
S A SCIENTIST
I value experiments that test our beliefs and the efficacy of different treatments. At the same time, it is also clear to me that experiments, particularly those involving medical placebos, raise many important ethical questions. Indeed, the experiment involving mammary ligation that I mentioned at the beginning of this chapter raised an ethical issue: there was an outcry against performing sham operations on patients.

The idea of sacrificing the well-being and perhaps even the life of some individuals in order to learn whether a particular procedure should be used on other people at some point in the future is indeed difficult to swallow. Visualizing a person getting a placebo treatment for cancer, for example, just so that years later other people will perhaps get better treatment seems a strange and difficult trade-off to make.

At the same time, the trade-offs we make by
not
carrying out enough placebo experiments are also hard to accept. And as we have seen, they can result in hundreds or thousands of people undergoing useless (but risky) operations. In the United States very few surgical procedures are tested scientifically. For that reason, we don't really know whether many operations really offer a cure, or whether, like many of their predecessors, they are effective merely because of their placebo effect. Thus, we may find ourselves frequently submitting to procedures and operations that if more carefully studied, would be put aside. Let me share with you my own story of a procedure that, in my case, was highly touted, but in reality was nothing more than a long, painful experience.

I had been in the hospital for two long months when my occupational therapist came to me with exciting news. There was a technological garment for people like me called the Jobst suit. It was skinlike, and it would add pressure to what little skin I had left, so that my skin would heal better. She told me that it was made at one factory in America, and one in Ireland, from where I would get such a suit, tailored exactly to my size. She told me I would need to wear trousers, a shirt, gloves, and a mask on my face. Since the suit fit exactly, they would press against my skin all the time, and when I moved, the Jobst suit would slightly massage my skin, causing the redness and the hypergrowth of the scars to decrease.

How excited I was! Shula, the physiotherapist, would tell me about how wonderful the Jobst was. She told me that it was made in different colors, and immediately I imagined myself covered from head to toe in a tight blue skin, like Spider-Man; but Shula cautioned me that the colors were only brown for white people and black for black people. She told me that people used to call the police when a person wearing the Jobst mask went into a bank, because they thought it was a bank robber. Now when you get the mask from the factory, there is a sign you have to put on your chest, explaining the situation.

Rather than deterring me, this new information made the suit seem even better. It made me smile. I thought it would be nice to walk in the streets and actually be invisible. No one would be able to see any part of me except my mouth and my eyes. And no one would be able to see my scars.

As I imagined this silky cover, I felt I could endure any pain until my Jobst suit arrived. Weeks went by. And then it did arrive. Shula came to help me put it on for the first time. We started with the trousers: She opened them, in all their brownish glory, and started to put them on my legs. The feeling wasn't silky like something that would gently massage my scars. The material felt more like canvas that would tear my scars. I was still by no means disillusioned. I wanted to feel how it would be to be immersed completely in the suit.

After a few minutes it became apparent that I had gained some weight since the time when the measurements were taken (they used to feed me 7,000 calories and 30 eggs a day to help my body heal). The Jobst suit didn't fit very well. Still, I had waited a long time for it. Finally, with some stretching and a lot of patience on everyone's part, I was eventually completely dressed. The shirt with the long sleeves put great pressure on my chest, shoulders, and arms. The mask pressed hard all the time. The long trousers began at my toes and went all the way up to my belly button. And there were the gloves. The only visible parts of me were the ends of my toes, my eyes, my ears, and my mouth. Everything else was covered by the brown Jobst.

The pressure seemed to become stronger every minute. The heat inside was intense. My scars had a poor blood supply, and the heat made the blood rush to them, making them red and much more itchy. Even the sign warning people that I was not a bank robber was a failure. The sign was in English, not Hebrew, and so was quite worthless. My lovely dream had failed me. I struggled out of the suit. New measurements were taken and sent to Ireland so that I could get a better-fitting Jobst.

The next suit provided a more comfortable fit, but otherwise it was not much better. I suffered with this treatment for months—itching, aching, struggling to wear it, and tearing my delicate new skin while trying to put it on (and when this new thin skin tears, it takes a long while to heal). At the end I learned that this suit had no real benefits, at least not for me. The areas of my body that were better covered looked and felt no different from the areas that were not as well covered, and the suffering that went along with the suit turned out to be all that it provided me.

You see, while it would be morally questionable to make patients in the burn department take part in an experiment that was designed to test the efficacy of such suits (using different types of fabrics, different pressure levels, etc.), and even more difficult to ask someone to participate in a placebo experiment, it is also morally difficult to inflict painful treatments on many patients and for many years, without having a really good reason to do so.

If this type of synthetic suit had been tested relative to other methods, and relative to a placebo suit, that approach might have eliminated part of my daily misery. It might also have stimulated research on new approaches—ones that would actually work. My wasted suffering, and the suffering of other patients like me, is the real cost of not doing such experiments.

Should we always test every procedure and carry out placebo experiments? The moral dilemmas involved in medical and placebo experiments are real. The potential benefits of such experiments should be weighed against their costs, and as a consequence we cannot, and should not, always do placebo tests. But my feeling is that we are not doing nearly as many of them as we should.

Reflections on Placebos: Don't Take Mine Away!

A few years ago, a woman seated next to me on a flight to California took a longish white cylinder from her bag, opened it, and dropped a quarter-size tablet into her airplane cup of water. I watched, mesmerized, as yellowish bubbles fizzed and foamed wildly in the cup. After the activity settled, the woman drank the whole concoction in two large sips.

I was very curious about this and, as she looked very pleased with the whole process, I asked her what she was drinking. She handed me the longish white tube. It was Airborne!

The description on the tube truly impressed me. These tablets, it said, had the power to boost the immune system and help fight the germs that surround passengers during flights. If I took it at the first sign of cold symptoms or before entering a crowded, potentially germ-infested environment, I could prevent the awful colds that I constantly fought. I could not imagine anything better. And, unlike any other medication I have seen, this one stated clearly that it had been invented by a second-grade teacher! Who better to design cold medications than someone surrounded day in and day out by germ-laden children? Since teachers are continually catching colds from their students, this seemed like a natural connection. Besides, I loved the bubbling, foaming action.

My seatmate could not ignore my enthusiasm, so she asked me if I wanted to try a tablet. I happily accepted one, dissolved it in my half cup of water, watched the fizzing and foaming, then drank the yellowish stuff in one gulp. I could see before me the image of my own beloved second-grade teacher—Rachel—and my fondness for her added to the experience. Almost immediately, I felt better. I completely avoided getting sick after that flight. Proof! Thus did Airborne become a staple in my travels.

Over the next few months I used Airborne as the tube suggested. Sometimes I drank it during a flight, but more often I consumed it after the flight. Each time I repeated the ritual, I immediately felt better about myself and about my chances of fighting off the insidious airborne diseases surrounding me. I was 99 percent sure that Airborne was a placebo, but the bubbles and the ritual were so wonderful that I just knew it would make me feel better. And it did! Besides, taking it made me more confident in my health and less stressed about getting sick—and, after all, stress and anxiety are known to lower immunity.

A few years later, just as I was beginning my book tour and had to fly constantly, I heard the tragic news that Victoria Knight-McDowell, the second-grade teacher from California who invented Airborne, had agreed to pay a sum of $23.3 million in a settlement for false advertising, in addition to refunding money to consumers who bought the product. The manufacturer had to change the statements and claims on the product itself. The former “miracle cold buster” had been demoted to a simple dietary supplement made from 17 vitamins, minerals, and herbs. The old claim that Airborne “supports your immune system” remained intact on the packaging, but was accompanied by one of those pesky daggers (†) indicating fine print. You have to search for it, but eventually you find it hidden away in the back corner: “These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any diseases.” How depressing.
*

So there I was, faced with at least three flights a week for the next few months, and the magic of my Airborne was ripped away from me. I felt as if I had learned that a person I'd considered a good friend for many years had never really liked me and had been saying bad things about me behind my back. Maybe, I thought, if I went straight to the drugstore and got some of the old containers with the exaggerated and inflated claims, they might help restore the magical power of Airborne. But this seemed unlikely. I could not avoid the knowledge that my fizzy miracle was no such thing. It was just some dumb vitamin with neat Alka-Seltzer special effects. In the face of such disillusionment, I can no longer enjoy the wonderful placebo-immunity-enhancing effect of yesteryear.

Oh why, why did they do this to me? Why did they take my wonderful placebo away?

CHAPTER
12
The Cycle of Distrust

Why We Don't Believe What Marketers
Tell Us

I
'm not sure about you, but I get a lot of spam e-mail. People are constantly offering me the chance to make a lot of money or buy cheap software. They tell me I'm the one person they've always wanted to meet. They offer to enlarge or improve different parts of my body. I was even presented with the opportunity to get another Ph.D.—one that would not require another five years of hard labor. Instead, they would credit me for my life experience. So far, this is the only one that I've tried out. But after I contacted the organization offering this degree, they decided to drop me from their list of interested prospective students. Sadly, I never did get credit for my life experience.

Beyond spam, I get a lot of other proposals and requests. I was particularly curious about one that came from my local cable company. It promised one month of free digital cable. Since I'm interested in any offer that has the word
free
in it (see Chapter 3, “The Cost of Zero Cost”), I decided to take this one on. I called the company, and in a matter of days, a technician came to my house and installed my free digital cable. A month later, I received a bill for the free digital cable and found that it actually cost $60. When I called the customer service department, the nice fellow who took my call patiently explained that, unfortunately, I had problems with reading comprehension. He pointed out that the terms of the agreement were clearly explained in the seven-point font at the bottom of the company's ad. After I paid for the regular analog service, the box, the connection fee, and the remote, it said, I would “get for free” the
difference
between that amount ($60) and the standard amount ($79) for digital cable.

I generally consider myself a fairly trusting person, but with all the dubious offers and news about the bad behavior of businesses, I feel myself becoming less trusting and more suspicious. It seems that I'm always looking for the catch, and it turns out that I'm not alone in this paranoid mindset. Some years ago, two very perspicacious researchers, Marian Friestad and Peter Wright, suggested that people in general are starting to understand that the offers companies put before us are in their best interest and not ours. As a consequence, we've become more distrustful—not only of those who are trying to swindle us but of everyone.

Free Money

After talking about our own experience of increasing disillusionment, Ayelet Gneezy (a professor at the University of California at San Diego), Stephen Spiller (a doctoral student at Duke University), and I decided to try to measure the extent of the public's suspicion of companies. Our first question was how to measure the extent of distrust. We could, of course, ask each person in a group, “How suspicious do you feel on a scale from 1 to 10, 1 being not at all suspicious and 10 being very suspicious?” The problem with this type of measurement is that it's difficult to tell exactly what 5.7 on such a scale really means. Would it suggest that people believed that the amazing offer from their cable company was real? Or would it mean that they were skeptical enough to read the fine print first? In addition, a lot of our research has shown that people often have wrong intuitions about their own behavior—they can say one thing but do another.

So, we decided to measure a behavior that would tell us people's degree of distrust, and our tool of choice was a free money experiment. One lovely spring day, we set up a booth at a big commercial center in Cambridge, Massachusetts, manned by some undergraduate students. Above our booth was a large sign that read “Free Money.”

On the front of the booth was a smaller sign that indicated how much money we would give people for free. Sometimes the sign said $1, sometimes $5, and other times $10, $20, or even $50. The busy people who worked at this commercial center passed a sign saying “Free Money, $20” (or whichever denomination it happened to be at the time) on their way to lunch or as they were leaving for the day. They also saw a pile of bills in the given denomination on the table. How many people do you think stopped and took us up on our offer?

We didn't expect people to slow down and simply pick one of the bills off the table, taking us (or our sign) completely literally. We thought they would first ask if we were serious. On hearing us say, “Yes, we are, and you are welcome to take a bill,” we assumed they would take a bill and go on their way. And lo, every so often someone would walk by the booth slowly, reading the sign and glancing at the students, who really did not look like crooks.

Here's how the scenario generally went:

Reassured, the man would look around and help himself to a bill. He would hold it up for a second, as if waiting for something to happen. Then, he would turn around and begin to walk slowly away. His pace would eventually pick up, and he would disappear around a corner.

When we offered $1, only 1 percent of those who passed our booth actually stopped to check it out. When we offered $5, a few more did, and so on up to $50. But even when we offered $50, only 19 percent of passersby stopped and took a bill. We were surprised and slightly disappointed with this low level of trust; 19 percent is not a high level of success, particularly when free money is (literally) on the table.

It is important to realize that in this setting, people did not necessarily have to believe that the money we offered was entirely free. They might have expected to have to do something in return—answer a short survey, for example. But even if they suspected as much, it might still be the case that the payment was a worthwhile return on an investment of answering a few questions.

Clearly, the vast majority believed that this was some kind of trick—so much so that it was not worthwhile to even ask. Occasionally, one of the students would approach someone who had clearly seen the offer on the booth but chosen to ignore it. When asked why they chose not to approach the booth, respondents said they believed that it was some kind of scheme. (A favorite claim made by economists is that there are no $100 bills lying on the sidewalk; if there were, the argument goes, someone would have already picked them up.) To us, this looked like evidence of deep mistrust.

The Tragedy of the Commons

Trust, like money, is a crucial lubricant for the economy. When people trust other people, a merchant, or a company, they are more likely to buy, lend, and extend credit. In the old days, business was conducted on a gentleman's handshake. But when the handshake results in a swindle, trust disappears and all subsequent transactions—whether between cheaters or the genuinely good-hearted—become more difficult.

A good analogy for social distrust can be found in the “tragedy of the commons.” This phrase can be traced back to Oxford professor William Forster Lloyd, who described the phenomenon in his 1833 book on population. He noted that in medieval England, parishes had common land on which each member of the community could graze a limited number of cattle and sheep.
*
Keeping the number of animals low allowed the grass to grow back at a speed that kept its level more or less the same. This approach was rather successful when all the farmers stuck to the rule. Unfortunately, in their selfish desire to improve their own financial situations, some of the farmers increased the number of their animals to a level that the land could not sustain. This strategy was very good (at least in the short run) for the individual farmers who had more animals, but each additional cow or sheep resulted in less grass for all of the animals. As the grass dwindled, all the livestock on the commons became malnourished and underproductive—a result that hurt everyone, including the greedy farmers.

Today, psychologists, economists and environmentalists use the phrase “the tragedy of the commons” to describe the same basic principle: when we use a common resource at a rate that is slower than the rate at which it replenishes, all is well. However, if a few individuals get greedy and use more than their share, the system of consumption becomes unsustainable, and in the long term, everybody loses. In essence, the tragedy of the commons is about two competing human interests. On one hand, an individual should care about the sustainability of shared resources in the long term because everyone, including the individual, benefits from it. At the same time, in the short term, the individual benefits immediately from taking more than his or her fair share. (Social scientists refer to such betrayers of social contracts as “defectors.”)

Of course, if we all cared about the common good or thought about the long-term consequences of our actions, we might not run into resource-sharing problems. But because human beings tend to focus on short-term benefits and our own immediate needs, such tragedies of the commons occur frequently. Take the wild salmon population, for example. While it is ideal for fishermen in general to limit their own catches so that the salmon population can be sustained, it's more profitable for an individual fisherman to overfish in a given year. But if too many fishermen even slightly surpass the sustainable limit, the overall fish population becomes depleted. (For this reason, salmon fishermen are now constrained by law to a limited number every year).

The current energy crisis is another example of the tragedy of the commons. Although there is a finite amount of fossil fuel in the world, some countries, industries, businesses, and individuals use far more than others while making little effort to minimize their impact on the common pool. Even public resources such as clean air, land, trees, and water fall victim to this problem. In the absence of cooperation among all the players in protecting such resources, a small number of misbehaving entities can have a devastating effect on everyone.

If we start to think about trust as a public good (like clean air and water), we see that we can all benefit from higher levels of trust in terms of communicating with others, making financial transitions smoother, simplifying contracts, and many other business and social activities. Without constant suspicion, we can get more out of our exchanges with others while spending less time making sure that others will fulfill their promises to us. Yet as the tragedy of the commons exemplifies, in the short term it is beneficial for each individual to violate and take advantage of the established trust.

I suspect that most people and companies miss or ignore the fact that trust is an important public resource and that losing it can have long-term negative consequences for everyone involved. It doesn't take much to violate trust. Just a few bad players in the market can spoil it for everyone else.